SARB accuses #BusisiweMkhwebane of abusing her power

JOHANNESBURG - South Africa’s central bank has accused Public Protector Busisiwe Mkhwebane of abusing her power in a legal battle over a report she wrote condemning its handling of a 1980s-1990s bailout.

Earlier this year, Mkhwebane said in a report the country’s then government and the South African Reserve Bank (SARB) failed to recover an apartheid-era loan of R1.125 billion made between 1985 and 1995 to Bankorp Limited, which was subsequently bought by Absa Bank.

Mkhwebane said her office's investigations had found that the white minority government of the time breached the constitution by supplying the loans. Absa, a subsidiary of Barclays Africa Group, denies any wrongdoing.

The central bank has also defended its actions at the time, saying if Bankorp had failed, this could have triggered a run on banks, with detrimental effects on the country’s entire financial system.

On Tuesday, the SARB published an affidavit filed on Monday in which it accused Mkhwebane of abusing legal process by taking too long to file her latest papers in the matter, and of also making false statements.

“As an organ of state, the public protector has heightened obligations in litigation. She is required to be frank and candid with the court and explain her conduct in a transparent and accountable manner," the SARB affidavit says.

“Ms Mkhwebane has not done so. She has failed meaningfully to address the very serious accusations against her that she is biased against the Reserve Bank and pursued an ulterior purpose in her investigation."

In her report released in June, Mkhwebane also recommended that the central bank’s mandate of maintaining price and currency stability be changed to focus on economic growth. She has since backed down from this stance, which triggered widespread criticism.